Third Time's a CharmApril 28, 2010 - by Donny Shaw
After being forced by Democrats to go down on record against debating financial reform three times in three days, the Republicans are ready to relent and let the debate begin. The Hill reports:
Senate Republicans say that Democrats have made important concessions on a Wall Street reform bill, paving the way for debate to finally begin in the upper chamber.
Senate Republican Leader Mitch McConnell (Ky.) released a statement Wednesday afternoon touting “a key agreement” to resolve disagreements over a $50 billion fund to liquidate troubled banks.
McConnell said that Democrats have agreed to close “loopholes” in a provision setting up the fund that would have allowed federal officials to draw on taxpayer dollars to wind down a troubled institution.
Presumably, this means that the Democrats won’t follow through on their plans to make the Republicans stay in the Senate an filibuster debate all night tonight.
We’ll have to see the details of the deal struck on the pre-funded orderly liquidation fund, but it wounds like a big win for the Democrats. The whole point of including the fund in the bill was to prevent bailouts by making sure that the F.D.I.C. has the money they need to liquidate a too-big-to-fail bank if it is failing. The bill text makes that abundantly clear. Closing “loopholes” in the fund shouldn’t change anything, unless, of course, McConnell means replacing the pre-funded fund with a plan to have big banks pay for the F.D.I.C. process of liquidating one of their competitors after the fact. That’s what the Obama Administration and the financial industry supports, but the CBO has said that it would cause the bill to go from reducing the deficit by $21 billion to adding $17 billion to it. Plus, as I explained here, the federal government probably wouldn’t follow through on collecting the money from the big banks in an environment where other big banks are failing.
I’ll update this post as soon as more details are released.